When terminals were first introduced in the United States, they supported the ASCII character set. This 7-bit character set has a total of 128 different characters available, although the first 32 aren't used, leaving a maximum of 96 different characters. With 96 characters, the alphabet, numerals and most of the special symbols used in American English are available.
As terminals were exported from the United States, problems arose because the character sets used abroad are different from the US. For example, in Great Britain the American # (number) symbol isn't used, but the £ (pound sterling) symbol is. In the case of non-English speaking countries, the situation is even more complex because accents are used, therefore increasing the number of characters that are required in order to display the language.
In order to circumvent this limitation, the National Replacement Character set (NRC) came about. Each country replaced some of the symbols used in the US ASCII character set with their own special characters. For example, in Great Britain, the ASCII symbol # is replaced with £ and in France the { and } symbols are replaced with é and è characters.
Although NRC is still popular, it causes problems when both the national character and the US ASCII character need to be displayed at the same time. For example, on an NRC terminal operating in France, it's impossible to display the message {éxperiment}, because the US ASCII symbol { is replaced with the French character é. Additionally, if a country uses multiple languages (such as in Switzerland), the situation becomes even more complex.
As most computers really store 8-bits per character, the US ASCII and NRC character sets were replaced over time with the 8-bit Western Latin-1 character set. With Latin-1, a maximum of 256 characters are allowed, although as with ASCII, this is reduced to 224 characters because the first 32 characters don't display.
With 224 characters able to display at the same time, both the US character set and many of the special characters used in Western European languages can be displayed. For example, the ñ in the Spanish word Niño has a value of 241 with the rest of the word made from standard US ASCII characters.
More modern operating systems (including Microsoft Windows) use Latin-1 as their standard character set due to its obvious advantages over US ASCII and NRC.
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